Market News and Charts for July 09, 2020
Hey traders! Below are the latest forex chart updates for Thursday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
As of writing, the trading pair is seen gradually climbing and is testing a critical resistance level. Unfortunately for the euro, the Australian dollar is still widely projected to head down towards its support level once it bounces off that resistance. The main cause of the Australian dollar’s current weakness is the concerns of investors about the resurgence of cases in Australia. Meanwhile, it’s also very evident that the euro is getting slower and slower especially after the announcement of the European Commission about slashing its eurozone’s growth forecast. Now, the EC projected an 8.7% contraction for the bloc’s economy this 2020. The revised forecast strained the euro as it was significantly lower compared to prior estimates of a 7.7% decline. Aside from that, the EC also warned about an “exceptionally high” risk for downsides which could cause the eurozone and the single currency to suffer much worse than what was initially projected.
Apparently, the recent announcement of British Chancellor of the Exchequer Rishi Sunak about a £30 billion help package does not have a significant impact on the strength of the British pound. In fact, the sterling is widely projected to remain buoyant against the Swiss franc thanks to several factors. One, of course, is the renewed risk sentiment which supports risk assets such as the British pound, and vice versa for anti-risk assets such as the Swiss franc. Another factor that greatly contributes to the sterling’s power is the improving sentiment towards the trade negotiations between the European Union and the United Kingdom. The pound is shooting higher this week after reports about the two parties circulated. According to sources, the EU and the UK are getting notably closer to finding a solution or agreement for its fishing rights issues. However, the British pound’s strength is also capped by the spending announcements from the British treasury.
The Japanese yen, like every other safe-haven currency, is seen trading lower against the British pound. The GBPJPY pair’s prices are on track to hit their resistance soon as bears continue to lose their power. The recent news about the Bank of Japan is holding back the Japanese yen, and the loss of appetite for safe-haven currencies is not helping it either. Earlier this Thursday, it as reported that the Japanese central bank downgraded its assessment for all the country’s nine regional economies. The said adjusted assessment is for the second consecutive quarter and it comes as the country and the rest of the globe continues to fight the coronavirus pandemic. During the announcement, BOJ Governor Haruhiko Kuroda said that the Japanese economy is in an extremely severe situation. The negativity reflected on the Japanese yen and has allowed the British pound to overpower it. The pound is mainly fueled by the Brexit deal-related hopes.
The Canadian dollar is poised to dominate the CADJPY trading pair thanks to the Japanese yen’s broader weakness. However, the pair also has potential for downside as the Canadian dollar is also extremely vulnerable to the country’s growing federal deficit. Thanks to the unforgiving impact of the coronavirus pandemic, Canada’s federal budget deficit soared to its all-time high of about 343 billion Canadian dollars according to the country’s Finance Minister Bill Morneau yesterday. Reports say that the deficit’s level has reached those from the devastating World War II which is ten times greater than the estimates of the government before the pandemic. Despite this, the stable conditions in the global crude market and the strong risk appetite is helping the Canadian dollar remain strong. As for the Japanese yen, the downgrade assessment of the Bank of Japan to all to the country’s region has caused it to buckle in the trading sessions.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!